Supreme Court Gives Big Win to Employers Over Unions

Supreme Court Unions agency fees labor law Alabama Employment Law
Public sector unions cannot require non-members to pay “agency fees.”

Today, the United States Supreme Court provided employers with a big win over labor unions.  In Janus v. AFSCME, the Court ruled that the First Amendment rights of non-union members were violated when they were forced to pay “agency fees” to support union activities.  Here’s a link to a Chicago Sun-Times article discussing the decision:  Government Workers No Longer Have to Pay “Fair Share” Fees.

An “agency fee” is also called a “fair share fee” or a “service fee.”  Those fees are imposed on employees who refuse to join a union in a workplace that is subject to a collective bargaining agreement.  Typically, those fees are imposed where the union is deemed the “exclusive representative” of all employees in a bargaining unit, including employees who decline to join the union.  In theory, non-union employees gain the benefit of union-negotiated wages and benefits.  Therefore, the “agency fee” is imposed so that non-union employees pay an amount equal to the union’s costs of collective bargaining and contract administration.  After the Janus decision, “agency fees” can no longer be imposed on employees in public sector jobs.

The impact of the Janus case for most employers in Alabama is minimal.  Alabama is a “right to work” state.  As a result, mandatory “agency fees” are generally impermissible in Alabama.  See Alabama Code § 25-7-34.  Potentially, this ruling might impact workers at “federal enclaves” in Alabama like Fort Rucker or Redstone Arsenal.  In many areas of those enclaves, the federal government possesses exclusive jurisdiction, and federal law can trump Alabama’s “right to work” laws.  But see Professional Helicopter Pilots Assoc. v. Lear Siegler Svcs., Inc., 326 F.Supp.2d 1305 (M.D. Ala. 2004)(find that Alabama’s “right to work” law controlled over Shell Field at Fort Rucker, because Alabama did not cede exclusive jurisdiction over that land).

Supreme Court Limits Whistleblower Claims Under Dodd-Frank

Whistleblower retaliation Dodd-Frank Alabama Employment law
The Supreme Court limited whistleblower retaliation claims under Dodd-Frank.

The United States Supreme Court recently released an opinion in which it narrowly defined the term “whistleblower” in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”).   Digital Realty Tr., Inc. v. Somers, No. 16-1276, 2018 WL 987345 (U.S. Feb. 21, 2018).   As a result, the Court limited the class of employees who can sue for retaliatory discharge under Dodd-Frank.  Under the Court’s interpretation, an employee is only entitled to protection if he or she directly reported violations of Dodd-Frank to the United States Securities and Exchange Commission (“SEC”).  Thus, employees receive no protection under Dodd-Frank for reporting violations internally at their company, or to some other source.

Under Section 922 of Dodd-Frank, a “whistleblower” is an individual who provides “information relating to a violation of the securities laws to the [SEC].”   Whistleblowers are entitled to protection under Dodd-Frank from retaliation.  In attempt to broaden Dodd-Frank’s whistleblower protections, the SEC adopted rules expanding the definition of “whistleblower” to employees who made internal complaints with their employers.

The employee in Digital Realty claimed that he was terminated after he reported alleged violations of the securities laws internally to company management.  The employee did not make a report to the SEC, and his employer argued that the claim was barred by the express language of Dodd-Frank.  The Ninth Circuit Court of Appeals nevertheless relied upon the SEC’s interpretation and found that the employee was entitled to whistleblower protection.

The Supreme Court’s opinion unanimously reversed the Ninth Circuit.  The Court particularly relied upon the clear statutory language of Dodd-Frank, which defined a “whistleblower” as a person who made a report to the SEC.  The Court also found that Congress’s “core objective” in Dodd-Frank was “to prompt reporting to the SEC. ”

The Digital Realty decision is a mixed blessing for employers.   On the one hand, it limits the circumstances in which an employee can sue under Dodd-Frank.   On the other hand, Digital Realty could cause employees to skip internal complaint procedures and proceed straight to the SEC.

Supreme Court Won’t Review 11th Circuit LGBT Decision

Supreme Court LGBT Alabama Employment Law
The United States Supreme Court Declined to Hear an LGBT Discrimination Case

This morning, the United States Supreme Court announced that it would not review a decision from the Eleventh Circuit Court of Appeals, which held that sexual orientation is not protected by Title VII of the Civil Rights Act of 1964.

Jameka Evans is lesbian.  After she was terminated from her position as a security guard, she filed a pro se (without a lawyer) lawsuit claiming that she was terminated because of her sexual orientation.  Her case drew the attention of the Lambda Legal Defense and Education Fund and the United States Equal Employment Opportunity Commission, which helped her to argue the case as amicus curiae (friends of the court).  A panel of the Eleventh Circuit ruled that Title VII of the Civil Rights Act does not protect against sexual orientation discrimination.  But, consistent with numerous prior decisions, the Court also held that Ms. Evans could sue for discrimination based upon “gender nonconformity.”

Lambda Legal asked the Supreme Court to review the Eleventh Circuit’s decision, but the Court declined to do so this morning.  Here’s an article from The Hill discussing the decision:  Supreme Court Refuses to Hear LGBT Workplace Discrimination Case.

The Evans decision is consistent with a long line of precedent in the Eleventh Circuit.  In fact, I previously discussed this issue here:  LGBT Issues In the Workplace.  Nevertheless, there may be a trend developing in other courts to protect sexual orientation under Title VII.  In April, the Seventh Circuit Court of Appeals ruled that Title VII applies to such claims.  Those types of conflicts between Circuit Courts of Appeals often lead to decisions by the Supreme Court.  Thus, it is possible that the Supreme Court will be asked to review this issue again in the future.

Constructive Discharge Claims Just Got Easier for Employees


Supreme Court

Yesterday, the United State Supreme Court released a decision which makes it easier for employees to win constructive discharge claims.  See Green v. Brennan, No. 14-613, 2016 WL 2945236 (May 23, 2016).  A constructive discharge occurs when an employer makes an employee’s working conditions so intolerable that any reasonable person would be compelled to resign their job.

The issue in Green concerned the time limitations period in constructive discharge claims.  Generally, employees are required to file a charge of discrimination with the EEOC within 180 days of the last discriminatory act.  Under that general rule, some courts required employees to file their EEOC charge within 180 days of the last “bad act” by the employer.  Other courts permitted the employee to file within 180 days of deciding to resign.  Typically, the resignation decision occurred later than the last “bad act” and employees in some courts found their claims barred by the limitations period.

In a 6-2 decision, the Supreme Court found that the limitations period begins to run on the date that the employee declares his resignation — not on the date of the last discriminatory act.  As a result of that decision, employers and employees now have clarity on the limitations period in constructive discharge cases.  But, employees are also given a longer limitations period, which removes one potential defense for employers.